Indeed, the reason you never hear how much piracy costs the artists is because it's not really possible to know. What you'd basically be trying to find is who would have bought the album but didn't. There is no way of finding out something completely hypothetical like that. The best you could do is what they often do which is look at album sales in the years since filesharing has appeared, but that's just correlations, you can't be sure what the cause is.

I contend most of the time that the decline of record sales is the fact that music SUCKS lately. Maybe that's just me.

The latest Rolling Stone, fine piece of journalism that it is, reports that, yet again, CD sales are down but digital sales are up. As a whole, the market is down. But major releases are still getting a decent level of sales. Coldplay, NIN, Radiohead, etc--typical big-name bands are still selling (even with some of them releasing their albums FREE first), as well as that whole Disney "tween" market exploding (which I think it should do literally). And there's still releases this year from AC/DC, Metallica, U2, and a few other groups that tend to buoy the industry. It will probably end up being the biggest year in a while for the industry, but it will likely still be down because there just aren't the same caliber of aggregate sales for any band, especially from a 90s perspective. I mean, N'Sync, Britney Spears, Backstreet Boys, Christina Aguilera, I hate to say this, really drove a lot of those 90s sales. Without a blockbuster release to market to a giant, rich, stupid segment of the population, the industry as a whole won't have the same sort of numbers.

However, I think that a lot of the mid-level bands aren't selling as well as they could be. Beck's newest album is stupidly good, and it's selling like hotcakes in indie stores, but I don't think it's exactly Odelay. And a lot of it I credit to the labels being to focused on keeping the status quo than actually, y'know, promoting the product like they used to.

As far as a "how much does this cost the artist" argument is concerned:

While it's impossible to know exactly how much a pirated download costs the artist, most artists get between 7% and 15% of the retail price of a CD. So that's about $.97 to $2.08 on a $13.88 CD from Walmart (which, in fact, usually pays less because they get their product at a discount). Some established artists, for instance, Metallica, get more than that, upwards of $3.50 per CD (depending on their contract). Add to that the fact that a large chunk comes out for what the label calls a "breakage allowance," which originated when vinyl albums broke during transport (but rarely happens to CDs), and hundreds if not thousands of CDs are sent out for free to radio stations, AND artists don't see one dime of sales from CD clubs like Columbia House, it all evens out to a pretty small amount of money per CD, which means that, in order to make any money, they have to sell in the range of the hundred thousands or millions to get a significant return. Sure, one CD download doesn't mean much, but a few hundred thousand CDs is pretty significant. Can I affix a specific number to it? No. But understanding how the industry works (i.e., labels get a lot and the band gets shit on) usually helps realize how much of an impact aggregate numbers of downloads can have.

Now, this is assuming that it's sold through a major label at a major retailer, new. And indie band that self-releases a CD and fronts all manufacturing costs and sells their album as merch on tour makes a significantly larger amount per CD. But it also costs them a lot more when you don't buy the album because you downloaded it. Sure, there's the argument that downloading drives sales, because I think it does, but even for entry-level or breakout bands, it cuts into what can potentially be a significant source of income.

EDIT: Forgot to mention that all costs of actually producing an album come out of the artist's share. Producers, engineers, studio musician's, everyone gets paid out of the artist's $.97 to $2.08. Oh, plus most bands split their profits three, four, or five ways, since most of the time, everyone in the band gets some sort of credit or compensation.

I don't know about music sucking lately, I think everyone always thinks that music currently sucks, because it's easy to look back and assume that there was more good stuff going on years ago in retrospect, without considering that it would have still been somewhat spread out in time. I think there's always good stuff going on, you just have to look for it. I think that's another reason that a lot of big record companies are reporting a downfall in sales. It's interesting that shows like Top of the Pops have been axed recently, because basically the charts are meaningless. Because of the internet, we're all listening to different stuff. The most popular music isn't necessarily the thing that most people are listening to. I think it's possible that people are diversifying in what they're buying, which means the sales are spreading across loads of different record labels, including many independent ones, which means that individual companies might be selling less because people are buying stuff from other labels instead.

Just my personal theory, I don't really have anything to back it up, except I think it's an idea that's explored in Chris Anderson's The Long Tail (although I haven't read it), for example, iTunes make more money out of the vast numbers of albums that continue to sell but weren't necessarily hits, than they do out of the popular stuff.

i think if you are an unknown the current system can be a great way to get your work out there and new bands, to a degree,are probably going to create a greater guilt factor in the user when they download illegally (this could just be me). but with minimal investment the internet offers new bands a whole slew of potential customers they would not otherwise have had access to.

established bands and bands that the big record companies are trying to push are generally shackled to the old methods of distribution -- huge overheads in attendance and shareholders mean they need to make more to feed the machinery they have constructed around themselves. time to shake it off i say. all it is going to take is one visionary in one of the record companies to see that they can make more money by streamlining their own operations and using these sales tactics, something that seems to have slipped by them thus far, and there might be a big shake up and some lay-offs.

online exclusives could be used like loss leaders or to create a market buzz a la freakangels -- just look at how many people come here and are going to buy the graphic novel, even with it remaining free online. i think people would choose a cheap and safe download option over having to risk limewire and its bloody viruses. my main reason for having used downloads is that my music collection on CD is too large to carry when travelling and it got wipedoff my hard drive when i had to re-format it. crap reason? maybe. but true.

and again i sat down to write something and don't think i really hit what i wanted to say. i just don't think there is a single solution that will cater to people throughout the music buying spectrum because new bands and small record companiesuse the internet in a different way to the big reecord companies expect to use it. i think the move to regulate ISPs will see not only the record companies in severe trouble but the ISPs too -- people will vote with their feet and go elsewhere.

While it's impossible to know exactly how much a pirated download costs the artist, most artists get between 7% and 15% of the retail price of a CD.

Are you sure that it's the retail price, or is it the price that the record shop pays for it?

(I may be misremembering, but I seem to think that this is the situation I got with my book, so sales from Amazon, who get big discounts, aren't worth as much as from some shop that pays 60% of cover price. I will bow to your knowledge of such things as this question is based entirely on a currently frazzled brain).

I may be wrong, but I recall seeing a report put out by the Canadian gov't that showed that the most illegally downloaded albums were also the most sold albums. I'm not drawing a causal link between the two, but it does something to dispute the notion that more downloads necessarily equal less sales.

I find that while people may have strong ethical arguments against piracy (ones that are quite strong and obvious), the actual effect of that on artists is so negligible as to be impossible to track. The reactions people have to it are far in excess of the actual cost.

In an ideal world, we would just think of the huge peer to peer networks as international libraries, with a similar social function.

Well then, I just arrived here after having already read Doctrow's column on the ISP thing so I have no further comment on that part as he pretty much nails it.

A few thoughts though...

@ rickiep00h - the carpenter/chair analogy doesn't really work. Their really isn't that much pirate furniture out there (although I wish there was) because there is a prerequisite skill set that will prevent most people from following the plans even if they're available. Plus it just tales a long damn time to make a good chair. It’s because of these reasons that I have no concern about making the patterns for my clothing designs available for free. By contrast copying digital media requires very little by way of skill, time or material resources.

The copyright issue as a whole is one that I find perplexing. I tend to be, at a gut level, radically opposed to IP laws. I find them to be morally repugnant but I don’t have much by way of an answer to how people should get paid for their work.

I know that as far as most small bands go they make the majority of their money from selling merchandise.

My business (supposedly) makes money by selling tangible goods which in turn cover the costs of the CC licensed multimedia projects we work on. The Multimedia stuff could be seen as advertising for hard goods but it’s more a case of trying to sell something to have enough money to produce free cultural materials. In practice I’m still deeply in debt so I’ll have to wait and see how it pans out.

The Library is an interesting aspect that I was thinking about the other day as I can’t see how it’s any different from file sharing aside from it’s being culturally acceptable.

Another thing which struck me recently was how the commercial music industry killed off “folk” music. By which I mean that music used to be a social activity that people engaged in with their friends and family not the genera that we call folk. I tend to feel that participating in the activity of making music with ones friends is hugely a valuable experience that most people miss out on these days. By creating a professional caste of musicians and an industry that pedals them has society lost something of value?

As someone who is often accused of being an artist I often wonder at the perceived value of the Artist in society and whether art benefits from having a professional class. I don’t think it’s something which benefits religion too much and I feel that art and religion are both ministries of the soul. Perhaps neither of them should be institutionalized.

i don't think it's a question of being too negligible to track so much as being impossible to track without tracking specific numbers of downloads. you can't really say what someone would have bought... i think that's the thrust of it there.

Blye : It would be interesting to hear. I used to buy literally a hundred or more CDs a year, for a long time. Most of them, I listened to once or twice, decided they weren't worth it, and sold them used or shelved them.

Now, I tend to use downloads to "screen" things - albums I listen to more than a couple of times, I tend to buy (assuming I'm not dead broke - in which case, they go on a list for later). This isn't just ethics - this is aesthetics. I love having the album art, and I like having something a *physical object* to fall back on, instead of a dodgy electronic purchase (don't get me started on iTunes).

I would indeed like to know who does similarly. More on the privacy aspects later - I think there are some goofy ideas out there about how the internet works...

So this thread hasn't been touched in three and a half years. It may be a fool's errand to poke it again. But the thing is a lot has happened and yet there's also the same old bullshit, new Presidential election year.

If anyone notices this... should I just start a new thread and link back to this one?

Amanda Palmer openly telling her fans to steal (most) of her music since she won't see a penny either way.

And so on. Which makes me think a few things. There are different kinds of piracy for the different kinds of produced work. How many people, in the end, directly made the product come into existence? Who is making sure you find out about it? How is the work consumed? (eyes? Ears? all at once? over time/episodes/tracks?) What ARE the numbers of converted fans after they find something for free? What is the ratio of the entitled downloader to the person willing & eager to kick some cash to the artist? How can we delineate when the Internet is being the solution and when it's allowing the problem?

Upthread are some really good thoughts on how tape exchanges didn't exactly cripple music. But then they could never be on the scale of file sharing. Online an artist or a TV* show can make itself know by reaching its audience through strategic marketing and word of mouth, all without fighting for the extremely limited broadcast schedule of actual television.

Where are we now? Obviously entertainment is having to reformat itself to factor in the Internet, now more than ever. And in the throes (hopefully the death throes) of a nasty, persistent economic downturn, the corporations in charge of promoting (and therefor choking off) access to entertainment have to make some really harsh decisions when they find they can't move as many units as they're used to. The Internet is making us rewrite a lot of How We Do Stuff, from idle acquaintances to political campaigns for top office. What's it up to now in early 2012?

Where are we headed? More gypsy artists like Ms Palmer, ready to do anything for attention, making their whole lives part and parcel of their punk cabaret art? Writers who either strike it big over a few media or else never leave their day jobs? Cutting off risky ventures like overseas distribution in favor of leaving the material accessible by Internet, with no physical media? Prognosticate, 'Chapellians! I want to see the future!

*TV is the old word but there isn't a new word. I'd say we need a new phrase for a "TV show" format of entertainment, but we probably won't get one. Just like we never got rid of "music record."

Hit the Video/Mp3 button, enter full URL into the little pop-up thingy, hit enter again. Maybe the buttons don't work right on your browser, due to the bits that make the magic work being disabled?

I used to pirate, back in my younger days. I'm older now and don't do that any more, because I grew out of it.

Also, that Louis C K special was worth every penny, and I'm glad it worked out for him. People keep saying "we want this, in this format, at this cost, without these restrictions". He gave it to them, and they happily paid. I really like it when the world somehow avoids making more cynical. :)

Between Louis CK, Amanda Palmer and other performing artists I think we're sort of figuring out how to make it work for individuals or very small groups with a tiny staff. Though I think we're never going to get out of needing to catch the attention much bigger named artists to give them a bump.

I wonder about a bigger outfit - the number of people it takes to create a whole TV show - not just a one show but multiple episodes or even seasons. Maybe the only thing for it is to start out free, a la The Guild. But, again, that still takes making friends with bigger/weightier distributors. Word of mouth only goes so far, as it turns out.

PS - Re the video: those are the exact steps I took with the video/MP3 button and it came in as a link anyway.

Okay, this thread is relevant to my interests. I've been making my living through most of the millennium by copyright fees from journalistic work, I write, make music, I've worked in movies and TV and I hope to release some video games this year. So, the issue of copyrights hits quite close at home with me. Yet, I'm a copyright activist on the other side of the fence. I find it despicable how the industry is shooting itself on the foot continuously with the silly lawsuits, internet censorship, clunky DRM and all that... The biggest threat to my current and future livelihood are not pirates, it's groups like RIAA, MPAA and their domestic versions.

if you think of protocols and websites as features of the network, then saying "fix the Internet so that it doesn't run BitTorrent", or "fix the Internet so that thepiratebay.org no longer resolves," sounds a lot like "change the sound of busy signals," or "take that pizzeria on the corner off the phone network," and not like an attack on the fundamental principles of internetworking.

(highlighting is mine.)

Just really good points that trying to stop a kind of a crime makes it that much harder on legitimate computer use. I've been coasting on thinking that this tussle would sort of resolve itself; that the traditional industries are in a state of evolution and individuals in the middle of it right now would suffer until it all settles down, just like when the TV went into mass availability and the movie industry freaked out...until they realized they could license movies to air. But this brings up interesting points deeper than what I had been thinking.

I hope more people have thoughts, not just me and Vornaskotti.... Where have all the Whitechapelthinkers gone?

I admit I'm a little burned out even trying to debate piracy issues with people. I've had to quit another forum over it, because so many people have the same entitlement views on it ("a copy pirated isn't a lost sale, they wouldn't buy it anyway!", "Why should a developer have the right to protect their work?", "it's not theft") that it brings me to tears.

The way the games industry is handling piracy right now? Isn't really working. No-one likes DRM, and I think you'll see that slowly phasing out in games over this year. The current 'trick' is the online pass. If you're not familiar with those, it's where you make some aspect of the game not work (usually the online multiplayer part) unless you enter a code that comes on a bit of paper in the box. If you don't have a code (cause you're a pirate, or even because you bought it second hand) then you can buy a code for $10.

Consumers hate it. Retailers who depend a lot on second hand sales hate it. Gamestop for example hated it to the point where they've actually negotiated with publishers to be able to print their *own* unlock codes for the second hand racked games, as reduced second hand sales will likely kill them off.

One argument is that if games were cheaper (and they're the price they are because, hey, paying 150 creatives to make the thing has to be paid for somewhere) then people wouldn't pirate as much. But piracy on the iPhone is a *massive* problem, and those games only cost like a dollar. If people can get it for free, then they will.

Pretty much the only tactic that seems to work is subscription based stuff like World of Warcraft, or the freemium model used by Zynga etc...